Belgian energy companies are taking the Federal Government to court over the latter's implementation of an EU-mandated 'excess profit tax' worth €1.3 billion.
The companies launching the complaint, which will be considered by Belgium's Constitutional Court, include major players such as Engie and Luminus (the largest and second-largest Belgian energy companies respectively), as well as smaller energy producers such as Eoly and 2Valorise.
Several energy sector federations including the Federation of Belgian Electricity and Gas Companies (FEBEG) and the Flemish Organisation for Sustainable Energy (ODE) have also initiated legal proceedings.
The excess profit tax, sometimes also referred to as a 'solidarity contribution', was introduced in Belgium in December last year after being mandated by the Council of the European Union in October.
Its goal is to protect Europeans against soaring energy costs precipitated by Russia's full-scale invasion of Ukraine in February 2022. "Every euro collected through the excess profit tax goes back in full to our families and companies," Federal Energy Minister, Tinne Van der Straeten (Flemish Greens), said earlier this year.
Disputing the means, not the ends?
Speaking to De Tijd newspaper, many energy companies argued that their problem is not so much the existence of the excess profit tax itself, but rather its implementation.
In particular, they claimed that the legislation proposed by Van der Straeten does not, in fact, constitute a tax on excess profits, but instead levies fees based on erroneous estimates about energy companies' potential gains.
"If there were gains, Luminus wants to make its contribution in the context of the energy crisis," said Luminus spokesperson Stéphane Cornet. "But the way the tax is set up in Belgium is a tax on turnover, based on suspicions, and without taking into account possible losses of the company."
Other complainants took issue with the 'retroactive' nature of the bill, whereby companies were taxed from August last year despite the legislation only being introduced in December.
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"This law violates several of Engie's rights, such as the principle of equality, the prohibition of retroactive effect and the right of ownership," said Engie spokesperson Hellen Smeets.
Van der Straeten, however, remains confident that Belgium's judicial system will ultimately vindicate the government's actions.
"I am confident in the legal robustness of the law, but regret the signal that the sector is giving to families and businesses, in particular that it protects profits made from the war [in Ukraine]," she said.
"The Belgian Commission for Electricity and Gas Regulation (CREG, Belgium's federal energy watchdog) has repeatedly confirmed that the sector was making surpluses, while our households' energy bills skyrocketed and businesses had to close."
